Shareholders Will Most Likely Find LEM Holding SA's (VTX:LEHN) CEO Compensation Acceptable

CEO Frank Rehfeld has done a decent job of delivering relatively good performance at LEM Holding SA (VTX:LEHN) recently. As shareholders go into the upcoming AGM on 24 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

See our latest analysis for LEM Holding

How Does Total Compensation For Frank Rehfeld Compare With Other Companies In The Industry?

Our data indicates that LEM Holding SA has a market capitalization of CHF2.1b, and total annual CEO compensation was reported as CHF1.2m for the year to March 2021. Notably, that's an increase of 23% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CHF525k.

For comparison, other companies in the same industry with market capitalizations ranging between CHF917m and CHF2.9b had a median total CEO compensation of CHF1.0m. From this we gather that Frank Rehfeld is paid around the median for CEOs in the industry.

Component	2021	2020	Proportion (2021)
Salary	CHF525k	CHF458k	43%
Other	CHF688k	CHF529k	57%
Total Compensation	CHF1.2m	CHF987k	100%

On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. LEM Holding sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

LEM Holding SA's Growth

Over the last three years, LEM Holding SA has not seen its earnings per share change much, though there is a slight positive movement. It saw its revenue drop 2.3% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has LEM Holding SA Been A Good Investment?

With a total shareholder return of 27% over three years, LEM Holding SA shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for LEM Holding that you should be aware of before investing.

Important note: LEM Holding is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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